How To Repatriate Your Profits For Property Sales in India in 2017

Back in the day, NRI’s who sold their properties in India used to have a hard time when trying to get that money back to their bank accounts.

Because of this, lots of people were using the infamous “Hawalas,” private money transfers that were not legally supported by the government. And, of course, when the government found out, everybody’s transactions were frozen, and people were losing their money.

This applies only to two residential properties, but unlimited commercial ones. From the third residential property on, your deposits have to go through an NRO account with a limit of repatriation of 1 Million USD per year.

If you go through with these transferences, TDS can also apply to your gains (up to 20% for properties owned over 3 years). However, you can get a waiver for these taxes if reinvesting your gains in a new property.

b. You purchased the property with money from a Non-Resident Ordinary (NRO) account.

The taxes for this type of sale apply in the same way as the previous case, but you’ll have to deposit both your profits and your principal gains into an NRO account.

c. You inherited your property.

You can need or not permission from the RBI to repatriate these funds, and that depends on whether the person was an Indian resident (no permission required) or not (permission required).

Also, keep in mind that for this case you’ll also need to get a specific format done by a Chartered Accountant (CA).

Step 2. File your paperwork.

Once you know if you’re a case a, b or c, you need to file for the following papers, which you’ll later take to the bank.

Form #1: Form 15CB.

This form can easily download from the NSDL website. This form’s purpose is to demonstrate that your profits come from property sales, but you don’t need to fill it. Take it to a CA, who will sign it and fill it for you.

Form #2: Form 15CA.

FIlling this form is a more detailed part of the process, as you’ll need to have the previous form completed and fill by yourself this one. We’ve found this excellent guide, which takes you step by step in this process.

Step 3. Go To Your Bank

Choosing a bank is a very personal election, as you may be more used to working with a particular bank, or you may have looked the benefits a particular one offers for this type of transfers. Without directly endorsing any options, here are recommendations you could consider following, as they’re frequently cited by savvy NRI’s:

Keep an eye for the exchange rate:The currency exchange happens on the bank that’s making conversions, which means, if you decide to send rupees from India, you need to check the exchange rate of your bank back home. If you’re sending dollars, you should check the exchange rates for your bank in India. Banks often value their currencies differently, so make sure to ask to other NRI’s or check the Internet for the best rupee rates in your country.

Consider that currency is also an investment:Depending on where you live, it also could make more or less sense to keep your money in rupees or to exchange it, so make sure to check the projections for your particular case to choose which currency you’d like to maintain.

Choose your bank with caution: Some commonly mentioned options include HSBC, Axis, Western Union and ICICI, which are big, reputable institutions. Take a good look at their times, rates and commissions, and make sure to ask questions when something is unclear. Axis in particular in well known for expediting diverse instruments, such as travel cards that can be useful if you’d also like to take a small (under $2,000) amount of money with you.

Check the laws back home: This is a topic too wide to cover the whole world, as NRI’s in the U.S, for example, may not be subject to the same income taxations that NRI’s in Singapore, the U.K, UAE, etc. Every country has particular laws and restrictions over how should proceed from profits outside its borders are treated, so you should call your embassy, talk to an accountant, to your bank or simply look on the Internet so you will not be surprised.

Know your alternatives:Sometimes repatriating the money will not be a viable option, and as hard as it might sound, knowing that you have alternatives is also healthy. Re-investments in new properties to keep your patrimony growing and other financial assets are often tax-free for investors, and sometimes you can get your original investment back and only re-invest your profits without paying taxes. In case you’ve widely examined the situation and land to the conclusion that it would not benefit you to repatriate, start looking for the procedures for re-investing.

In case you do end up choosing a bank or institution, and whatever the instruments and particular services they provide for money transfers are, you’ll need to take both of the forms you previously filled with you, as well as both the Will and death certificates necessary in case you inherited the property.

From then on, your bank will take care of the transfer, and you should be finishing this procedure in little time, accomplishing an important milestone as an investor.

We hope this guide has been useful to you, and that you can repatriate your money with no trouble. Also, if you would wish to learn how to sell properties to other NRI’s close to you, please visit our main platform, Reobee.

As always, please make sure to subscribe to keep receiving the latest market insights straight into your email. Also, make sure to let us know which subject should we cover next in the comments!

Disclaimer: The Assumptions and opinions expressed in this article are those of the authors and do not necessarily reflect to favor any particular financial Institution or business entity or its affiliates. They should not be utilized in real-world analytic products as they are based only on limited and dated open-source information.

The materials available at this website are for informational purposes only. The material is not guaranteed to be accurate, complete, or up-to-date.

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